Hong Kong domestic health spending: Financial years 1989/90 to 2009/10

: This report presents the latest estimates of Hong Kong domestic health spending for financial years 1989/90 to 2009/10, cross-stratified and categorised by financing source, provider and function. Total expenditure on health (TEH) was HK$88,721 million in financial year 2009/10, which represents an increase of HK$5031 million or 6.0% over the preceding year. As a result of a slow revival in the economy from the financial tsunami in 2008, TEH grew faster relative to gross domestic product (GDP) leading to a marked increase in TEH as a percentage of GDP from 5.0% in 2008/09 to 5.2% in 2009/10. During the period 1989/90 to 2009/10, total health spending per capita (at constant 2010 prices) grew at an average annual rate of 4.9%, which was faster than the average annual growth rate of per capita GDP by 2.0 percentage points. In 2009/10, public and private expenditure on health increased by 6.2% and 5.8% when compared with 2008/09, reaching HK$43,823 million and HK$44,898 million, respectively. Consequently, public and private shares of total health expenditure stayed at similar levels (49% and 51% respectively) in the 2 years. With respect to private spending, the most important source of health financing was out-of-pocket payments by households (34.9% of TEH), followed by employer-provided group medical benefits (7.4%) and private insurance (6.8%). During the period, a growing number of households (mostly in middle to high income groups) have taken out pre-payment plans to finance health care. As such, private insurance has taken on an increasingly important role in financing private spending. Of the HK$88,721 million total health expenditure in 2009/10, current expenditure comprised HK$84,874 million (95.7%), whereas HK$3847 million (4.3%) was for capital expenses (ie investment in medical facilities). Analysed by health care function, services for curative care accounted for the largest share (66.2%), which was made up of ambulatory services (33.5%), in-patient curative care (27.3%), day patient hospital services (4.9%) and home care (0.5%). Notwithstanding the small share of total spending for day patient hospital services, there was an increasing trend over the period 1989/90 to 2009/10, likely as a result of policy directives to shift the emphasis from in-patient to day patient care. Hospitals accounted for an increasing share of total spending, from 28.2% in 1989/90 to 46.8% in 2002/03 and then dropped steadily to 43% to 44% during the period 2005/06 to 2009/10. This trend was primarily driven by reduced expenditure by the Hospital Authority. As a result of epidemics that were of public health importance (eg avian flu, SARS, swine flu) and expansion of the private health insurance market in the last 2 decades, spending on provision and administration of public health programmes, and general health administration and insurance accounted for increasing, though less significant, shares of total health spending over the period. Without taking into account capital expenses (ie investment in medical facilities), public current expenditure on health amounted to HK$40,951 million (48.2% of total current expenditure) in 2009/10. The remaining HK$43,923 expenditure was mostly incurred at hospitals (74.1%), whereas private current expenditure was mostly incurred at providers of ambulatory health care (50.9%). Although both public and private spending were mostly expended on personal health care services and goods (91.0% of total current spending), the distribution patterns among functional categories differed. Public expenditure was targeted at in-patient care (48.9%) and substantially less on out-patient care (26.0%). In comparison, private spending was mostly concentrated on out-patient care (43.4%), whereas in-patient care (23.3%) and medical goods outside the patient care setting (19.5%) accounted for the majority of the remaining share. Compared to the Organisation for Economic Cooperation and Development countries, Hong Kong has devoted a relatively low percentage of GDP to health care in the last decade. As a share of total spending, public funding (either general government revenue or social security funds) was also lower than in most economies with comparable economic development and public revenue collection base.